Chasing Cartel in Petrobras Case Means Record Data Trawl

Anna Edgerton

January 8, 2015 — 11:54 AM EST

Brazil’s antitrust regulator is embarking on its largest ever investigation: combing through an expected 100 terabytes of data for evidence that construction companies formed a cartel to win Petroleo Brasileiro SA contracts.

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Documents from the corruption and money-laundering case dubbed Carwash will include e-mails, contracts and meeting memos seized by federal police and prosecutors from the contractors’ offices last month, Vinicius Carvalho, who heads the agency known as Cade, said in an interview from Brasilia yesterday. Cade’s largest previous investigation involved 30 terabytes of information and took eight months to process. The U.S. Library of Congress’s printed collection would take up about 10 terabytes if converted into digital format.

State-run Petrobras, which banned 23 builders from bidding on new contracts during the investigation, has lost $100 billion of market value in the past four months as prosecutors expand their probe into companies that allegedly colluded and bribed officials to win contracts. The alleged cartel could extend to contracts in other industries, Carvalho said.

“The material we’re expecting from the police search is the most we’ve ever had,” he said. “It’s still too early to tell the scope of the investigation.”

If Cade’s technical team finds evidence of a cartel, companies face fines of as much as 20 percent of annual revenue, a ban on borrowing from public banks and a five-year embargo on bidding for public contracts. Cade must balance penalties with the need to maintain competition, Carvalho said.

Leniency Bid

Setal, one of the companies being investigated in the Carwash case, approached Cade last month seeking a leniency deal in exchange for providing documents and helping Cade’s technical team comb through the evidence, he said.

Carvalho said Cade’s superintendents still haven’t decided whether to accept Setal’s offer. As Setal was the first to seek leniency, that option isn’t open to other companies, he said.

“Petrobras is the target of the supposed cartel,” Carvalho said. “It’s the victim in this case.”